Cyprus further eases domestic currency controls

Fri Feb 21, 2014 10:07am EST

Related Topics

NICOSIA Feb 21 (Reuters) - Cyprus further eased domestic capital restrictions on Friday as part of an incremental relaxation of currency controls first imposed to prevent a run on its banks in March 2013.

In a Finance Ministry decree, authorities scrapped the compulsory automatic renewal of fixed term deposits and increased the allowance on domestic cash transfers for both companies and individuals.

A ban on cashing in cheques and a 300 euro cash withdrawal limit daily remained in force. The daily withdrawal allowance is cumulative from March 27, 2013.

The Mediterranean island became the first euro zone member state to impose capital controls to prevent a collapse of its banking system last March.

It was preceded by a decision to close a major bank, and force depositors to give up savings to recapitalise a second in return for 10 billion euros in aid from the International Monetary Fund and the European Union.

Friday's decree, valid for 35 days, increases the allowance on cash transfers to 20,000 euros for individuals, and 100,000 for companies on a monthly basis, irrespective of purpose. The previous limit was 15,000 euros, and 75,000 euros respectively.

Authorities are following a milestone-based roadmap for easing restrictions, under which domestic controls will be eased first.

Cyprus's Central Bank governor last week said that the island nation could abolish all controls by the end of this year if sufficient progress was made in adopting its bailout programme and confidence was fully restored in the economy. (Reporting By Michele Kambas)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.